MARKET WATCH 20 JAN 2021

NATIONAL

INTERNATIONAL

India may impose anti-dumping duty on yarn from China, Indonesia, Vietnam

An anti-dumping duty is a protectionist duty that a domestic government imposes on imports that believe it is below a fair market price.

The Indian government may impose anti-dumping duties on viscose spun yarn to protect domestic players from cheap imports from China, Indonesia and Vietnam. The duty was demanded by the Manmade Yarn Manufacturers Association of India as the import of viscose yarn from these countries has hurt domestic manufacturers.

Following the investigation, the Department of Trade Remedies under India’s ministry of commerce & industry recommended the move.

Viscose spun yarn originating or exporting from China, Indonesia, and Vietnam will attract duties ranging from $0.25 to $0.80 per kg for five years from the date of notification issued by the central government, DGTR said in its final investigative data.

The product under consideration is viscose spun yarn which is not kept for retail except by sewing thread by weight of synthetic viscose staple fiber by 85 percent or more by weight. Demand for viscose fabric has risen sharply in recent months.

Viscose-cotton blended yarn production is currently limited to a few spinning mills in and around Erode. These spinning mills can meet only 50 percent of the domestic demand, which has resulted in increased imports.

The price of viscose yarn, which was around $1.98 per kg, has risen to $3.01 per kg today due to the government announcement. Now is not the right time to impose anti-dumping duty on viscose cut yarn. Chairman of the Garment Export Promotion Council A. Sakthivel, said the proposed tariff would affect viscose garment production in the domestic and export markets.

India is the third-largest textile exporters in the world. Fabric is one of the dominant export product of India. It will impact the fabric exports of India.

Already raising the price of cotton has taken a toll on garment manufacturers further pushing up the prices of yarn and fabric. In this situation, garment manufacturers are not focusing on domestic fabric manufacturers due to the high price of yarn.

If the situation continues, Bangladeshi garment manufacturers will migrate to India. A total of 28-30% of the fabric comes from India to Bangladesh’s garments sector. On the other hand, as prices in India have risen due to anti-dumping duties, orders will move to China and sources.

Source: Textile Today

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India seen contributing 15% of global growth by FY26

The ongoing key reforms such as sops for manufacturing, easier labour laws, wooing FDI inflows and privatisation will help improve productivity and support long-term growth at 7.5-8 per cent levels, which if played out well, can help India contribute 15 per cent of global GDP growth by FY2026, says a report.

According to a report pencilled by the India economist at UBS Securities, Tanvee Gupta Jain, the country has the lowest manufacturing costs among peers, even though China retains significant ecosystem advantages and despite that India and Vietnam appear most likely to benefit from a shift out of China.

 

“The incentives for manufacturing, easier labour laws, encouraging FDI inflows and privatisation will help improve productivity and support long-term growth closer to the upside scenario of 7.5-8 per cent. If this played out well, we estimate that India could contribute 15 per cent to global GDP growth in the next five years ending FY26,” Gupta-Jain said without quantifying the present share.

The report expects the large local market potential, low labour costs, macroeconomic stability and the hope of strengthening ongoing reform momentum will help achieve these objectives.

Describing production-linked incentive (PLI) scheme ushered into to boost manufacturing, as a “golden opportunity for manufacturing” she says the five-year scheme is a significant turn in the manufacturing policy as it incentivizes select companies to scale up production and boost domestic value-addition.

“From almost zero now, India’s capacity should reach 20-30 per cent of the total global supply chain in the next two years,” says Gupta-Jain pointing to the plans of Apple to increase production in India and also global electric car major Telsa announcing local production of Model 3.

This is in spite of the fact that as much as 30 per cent of China’s gross exports are in industries that do not have strong competitive onshore supply chain advantages, mainly in electronics assembly industries, and are more vulnerable than others to relocation to low-cost locations.

Pegging FY22 growth at 11.5 per cent, making it one of the fastest in Asia, after a 7.5 per cent contraction in FY21, she says, beyond FY22, we expect growth to slow to 6 per cent in the subsequent years despite as the slowdown since 2017 has been led by structural issues, such as stretched balance sheets of households due to weaker job creation, government debt overhang, a risk-averse financial sector and low capex by corporates, and the still ongoing pandemic-related disruptions further widening income and wealth inequalities.

Another enabler is the rising FDI inflows, which had hit an all-time high of USD 56 billion in FY20, says the report and expects the inflows to cross USD 100 billion plus annually till FY26. Though the inflows are estimated to be falling to USD 40-45 billion in FY21 due to the pandemic, the report expects normality from the next fiscal.

Source: The Financial Express

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India plans foreign investment rule changes that could hit Amazon: Report

India is considering revising its foreign investment rules for e-commerce, three sources and a government spokesman told Reuters, a move that could compel players, including Amazon.com Inc, to restructure their ties with some major sellers.

The government discussions coincide with a growing number of complaints from India's brick-and-mortar retailers, which have for years accused Amazon and Walmart Inc-controlled Flipkart of creating complex structures to bypass federal rules, allegations the U.S. companies deny.

India only allows foreign e-commerce players to operate as a marketplace to connect buyers and sellers. It prohibits them from holding inventories of goods and directly selling them on their platforms.

Amazon and Walmart's Flipkart were last hit in Dec. 2018 by investment rule changes that barred foreign e-commerce players from offering products from sellers in which they have an equity stake.

Now, the government is considering adjusting some provisions to prevent those arrangements, even if the e-commerce firm holds an indirect stake in a seller through its parent, three sources said. The sources asked not to be named because the discussions are private.

The changes could hurt Amazon as it holds indirect equity stakes in two of its biggest online sellers in India.

Amazon, Walmart and Flipkart did not immediately respond to a request for comment.

Yogesh Baweja, the spokesman for the Ministry of Commerce & Industry, which is working on the issue, confirmed to Reuters any changes will be announced through a so-called "press note," which contains foreign direct investment rules. He did not give any details.

"It's a work in progress," Baweja said, adding an internal meeting on the subject last took place about a month ago.

"Of course Amazon's a big player so whatever advice, whatever suggestions, whatever recommendations they make, they are also given due consideration."

FRAYED TIES

The 2018 rules forced Amazon and Flipkart to rework their business structures and soured relations between India and the United States, as Washington said the policy change favoured local e-tailers over U.S. ones.

India's e-commerce retail market is seen growing to $200 billion a year by 2026, from $30 billion in 2019, the country's investment promotion agency Invest India estimates.

Domestic traders have been unhappy about the growth. They see foreign e-commerce businesses as a threat to their livelihoods and accuse them of unfair business practices that use steep discounts to target rapid growth. The companies deny they are acting unfairly.

"The way the government is thinking is that marketplaces are not doing what they are supposed to do. The government wants to tinker with the nuts and bolts of the policy," said one of the sources who is familiar with the talks on the policy changes.

 

LIMITING WHOLESALE TIES

India's trade minister Piyush Goyal has been critical of e-commerce companies in private meetings and told them to follow all laws in letter and spirit, Reuters has previously reported.

In the face of growing trader complaints and an antitrust investigation, Goyal last year said Amazon was not doing "a great favour to India" by making fresh investments. [L4N29L2YB]

Among other changes, the government is considering changes that would effectively prohibit online sales by a seller who purchases goods from the e-commerce entity or its group firm, and then sells them on the entity's websites, two of the sources said.

Under existing rules, a seller is free to buy up to 25% of its inventory from the e-commerce entity's wholesale or another unit and then sell them on the e-commerce website.

A boom in e-commerce in India accelerated last year when the COVID-19 pandemic drove more shoppers online. Flipkart, in which Walmart invested $16 billion in 2018, and Amazon are among the top two players.

"Ecommerce has already made its mark for itself in the country, particularly during COVID-19," Commerce Ministry's Baweja said. "They are bound to grow and a conducive environment should be there, which is good for the brick-and-mortar as well as e-commerce."

Source: The Business Standard

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Trident Ltd. unveils VISION 2025! Rs. 25,000 crore with 12% bottom line

Trident Ltd., in this regard, has unveiled its ‘VISION 2025’ which includes achieving revenue of Rs. 25,000 crore by 2025 with 12 per cent bottom line. It also has the target of making Trident a national brand and digital Trident, by completing the journey of Industry 4.0.

Rajinder Gupta, Chairman, Trident Group, said, ‘VISION 2025 marks a significant milestone in the journey of Trident. The same will greatly enhance our ability to synchronise our efforts for better positioning of the company in all business verticals.”

The Board of the company has authorised its strategy committee to examine various rapid-growth strategies to derive growth in-line with ‘VISION 2025’.

This committee shall explore various options including but not limited to following the unlocking value for the shareholders through restructuring of existing businesses, capital allocation strategies to improve return ratios and expansion of existing businesses/diversification into new businesses through organic/inorganic growth.

The committee will also focus on creation of focused business groups to generate synergies & explore business alliances, optimisation of leveraging capacity to create value for shareholders and penetration into new markets, product development, e-commerce and brand building.

At the same time, the company has reported 200 per cent surge in consolidated net profit at Rs. 112 crore for the quarter ending 31 December 2020.  The same was Rs. 37 crore during the same period of last fiscal.

The Ludhiana-based vertically integrated textile company’s consolidated revenue in Q3 from operations rose 20 per cent to Rs. 1,303 crore as against Rs. 1,082 crore in December 2019.

Recently, the company also got patent for “Fabric and Method of Manufacturing Fabric by European Patent office. The patent relates to ‘method of producing a fabric by subjecting the fabric to a special treatment, thereby obtaining increased air space in the resultant fabric.”

Source: Apparel Online

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Indian cotton yarn price going up till March 21

The price of Indian cotton fiber has not increased significantly but the price of cotton yarn is higher than domestic and export prices.

This problem is exacerbated by uncertain demand in supply chains. International buyers resumed their orders in the second half of 2020.

Already inventories have dried-up as supplies have failed to match demand and spinning mills resumed operations late across India.

The demand for Indian yarn in Bangladesh is raising buyers again with the sending of interrogation. A large number of orders are coming from Bangladesh and Vietnam.

Bangladesh is already planning to buy from the stock market as the price of cotton has skyrocketed.

Manpower was limited at the time of the lockdown-induced factory closure resulting in limited production. Later when demand increased, traders and agents started selling more to those who were willing to pay higher prices and, therefore, prices have risen significantly in the last six months.

According to experts, the price may rise further by March 21. This could lead to further difficulties in the Indian textile and garment supply chain. Already weaving price increased from 12-15 paisa/pick to 20-24 paisa/pick in India.

Source: Textile Today

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Premal Udani is new Chairman of AMHSSC

Premal Udani, MD of Kaytee Corporations, Mumbai is the new Chairman of Apparel Made-Ups and Home Furnishing Sector Skill Council (AMHSSC).

He has taken over from Virender Uppal, Chairman of Richa Global Exports, Gurugram.

Having four decades of experience in industry, Premal Udani is a well-known veteran in the apparel and textiles industry. He has also worked as Chairman of Apparel Export Promotion Council (AEPC) and President of the Clothing Manufacturers of India (CMAI).

He is currently also Chairman, Board of Trustees of and Member of the Board of Directors, AEPC since 1987.

Apart from this, he is also founding member of the India Knit Fair Association and was appointed by the Government of Gujarat for special projects pertaining to apparel industries.

He has been on the Board of major trade associations such as the Federation of Indian Export Organisations (FIEO), Federation of Indian Chambers of Commerce (FICCI) to name a few.

Dr. Roopak Vasishtha, CEO and DG, AMHSSC extended a warm welcome to him and looks forward to innovative and positive growth in the skilling eco-system post COVID-19, under his able leadership and guidance.

Launched in December 2013, AMHSSC was established to train, assess and certify personnel in the apparel and home furnishing sector.

Source: Apparel Online

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India must remain an integral part of global economy: Niti Aayog CEO Amitabh Kant

India must remain an integral part of the global economy if it has to grow at 9-10 per cent over the next three decades, Niti Aayog CEO Amitabh Kant said on Tuesday.

Speaking at the 15th India Digital Summit, Kant said India needs to become a major global exporting nation, without that it will not be possible to become richer and create wealth for its people over the next three decades.

“If India has to grow at 9-10 per cent over a three-decade period, it must be open, it must be an integral part of the global economy.

“It must be an integral part of the global supply chain,” he said.

Kant further pointed out that the government’s Aatmanirbhar Bharat initiative is not about protectionism, it is about making India part of the global supply chain.

According to the Niti Aayog CEO, post-COVID-19 pandemic, only those countries will grow who will use digital ecosystem.

“Post- pandemic global supply chain will be restructured, and you can be only competitive if you can use the power of technology,” he said.

Noting that India’s digital divide is narrowing down, Kant said if you look at the huge growth in Unified Payments Interface (UPI), it has grown manifold.

On the production-linked incentive (PLI) plan, he said the scheme in electronics and mobile manufacturing has received very good response.

“Like mobile and electronic manufacturing, the PLI scheme for battery manufacturing will give a much-needed fillip to country’s manufacturing,” Kant said, adding India needs to get into sunrise areas of growth.

The Pradhan Mantri Jan Dhan Yojana (PMJDY) has democratised access to financial services, the CEO added.

“India’s poor people’s access to the financial product is increasing due to the country’s fintech revolution,” he said.

Kant also pointed out that India is the vaccine capital of the world, as the country makes 70 per cent of the world’s vaccine.

Also speaking at the event, Facebook India’s Vice President and MD Ajit Mohan said the explosion of the internet happened in the last few months.

“Facebook, Instagram and WhatsApp used by businesses for growth which was not seen before 12 months,” he said.

Kant said India has huge potential to create USD1 trillion economic value from the digital economy by 2025 up from USD 200 billion currently.

The digital infrastructure has emerged as more significant infrastructure as compared to traditional infrastructure necessities such as power and roads, he added.

“Digital is the future,” Kant said, adding that if India wanted to improve the social or health sectors, going digital was critical.

Kant also stressed that digital transformation will drive India’s manufacturing sector forward with the help of technologies like AI, cloud computing, IoT, blockchains, and robotics.

“In order to take its rightful place in the global supply chains, India is leveraging these technologies and applying them across the manufacturing value chains to gain competitiveness.

“Data will be critical to meet these goals,” he said.

Source: The Financial Express

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Budget Byte: Export needs budgetary support for overall economic growth

Exports fall stronger than the economy as a whole, share in GDP dips

India’s exports are losing their share in gross domestic product (GDP). And for a considerable period, low oil prices were a key reason for this. But it also means that non-oil exports slogged during that phase. Into the pandemic, exports improved in Q2, but may not have risen greatly in Q3, assuming no change in quarterly GDP from last year’s level.

India’s exports fell fastest among emerging nations, need strong Budget boost

This performance, the IMF estimates, could be the worst among select emerging economies in 2020. For a well-rounded economic recovery, exports are crucial, but are limited by a new wave of Covid-19 that is affecting global demand. Strategic incentives through the Budget may help boost exports.

Source: The Business Journal

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FinMin allows Madhya Pradesh to raise Rs 1,423 cr additional fund through market borrowing

The Finance Ministry on Tuesday said Madhya Pradesh has been permitted to raise additional Rs 1,423 crore through market borrowing after the state implemented power sector reforms.

In a statement, the ministry said Madhya Pradesh has started Direct Benefit Transfer (DBT) of electricity subsidy to farmers in one district of the state with effect from December 2020. Thus, it has successfully implemented one of the three stipulated reforms in the power sector.

Successful implementation of the reform has made the state eligible to mobilise additional financial resources equivalent to 0.15 per cent of its Gross State Domestic Product (GSDP).

“Accordingly, the Department of Expenditure has granted permission to the State to mobilise additional financial resources of Rs 1,423 crore through Open Market Borrowings. This has provided the much needed additional financial resources to the State to fight COVID-19 pandemic,” the statement said.

The Centre had in May last year enhanced the borrowing limit of the states by 2 per cent of their GSDP. Half of this special dispensation was linked to undertaking citizen-centric reforms by the states.

The states get permission to raise additional funds equivalent to 0.25 per cent of GSDP on completion of reforms in each sector.

The four citizen-centric areas identified for reforms were (a) Implementation of One Nation One Ration Card System, (b) Ease of doing business reform, (c) Urban Local body/ utility reforms and (d) Power Sector reforms.

Till now, 14 states have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions.

Out of these, 11 states have implemented the One Nation One Ration Card System, 8 states have done ease of doing business reforms, 4 states have done local body reforms and Madhya Pradesh has implemented power sector reforms.

Total reform linked additional borrowing permission issued so far to the states stands at Rs 62,762 crore, the statement said.

Source: The Financial Express

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Budget could levy two new cesses

The Centre may consider introducing one or two new cesses  this Budget, one to fund part of Covid-related expenses and another to meet defence  expenditure. A final decision on the number of new cesses will be taken at the highest level and closer to the Budget day, according to multiple sources.

But introducing cesses amid rising demand by States to subsume cess and surcharge into basic tax rates may not go down well with them.

The health allocation is bound to go up due to Covid, necessitating a new cess. While normally the cess would have been applicable  for all taxpayers,  it may not be appropriate at this moment, considering how much the lower-income groups have been impacted by the pandemic.  This leaves open the option of levying a surcharge on the high-income group.

Alternatively, a cess on specific expenditure can be imposed. This again is a  difficult choice as the GST system discourages any new cess on expenditure related  to services.

Defence expenses

A second possible cess is for defence.

DK Srivastava, Chief Policy Advisor with EY India, said such a cess  may be considered once a recommendation for setting up an earmarked fund for defence purposes is received from the Finance Commission.

Cess and surcharge are levied for specific purposes. While every direct taxpayer is required to pay cess, only specified categories of taxpayers with high incomes are required to pay surcharge.  The Centre is not required to share the earnings from cess and surcharge with the States.

 No share for States

The principle of not sharing is causing  great concern for the States, whose finances have been battered by the pandemic. Thus, at  a pre-Budget consultation with Finance Minister Nirmala Sitharaman on Monday, at least two States — Tamil Nadu and Telangana — urged the merging of cess and surcharge with basic tax rates.

Tamil Nadu Deputy Chief Minister and Finance Minister O Paneerselvam said  the levy of cesses and surcharges  deprives the States of their legitimate share of the Centre’s tax revenue. “All such cesses and surcharges should be merged into the basic rate of tax, so that the States also receive their due share from the additional revenue,” he said.

For similar reasons, Telangana Finance Minister T Harish Rao asked the Centre to do away with the practice. His suggestion was that the Centre should increase the rates of taxes where the States can get a better share.

The share of cesses and surcharges in the revenue mix has been increasing,  particularly after the recommendations of the  14th Finance Commission, which raised the States’ share in the  divisible pool of taxes to 42 per cent from the earlier 32 per cent, observed EY’s Srivastava.

Cesses and surcharges, excluding the GST compensation cess, relative to the Centre’s gross tax revenues, have increased 6.3 percentage points, from 8.9 per cent in FY13 to 15.2 per cent in FY19. Revised estimates show a further increase to 15.6 per cent in FY20.

Source: The Business Journal

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Textile industry appeals to Parliamentary Standing Committee to facilitate global competitiveness for MMF

The National Committee on Textiles & Clothing (NCTC) has appealed to Parliamentary Standing Committee to facilitate global competitiveness for man-made fibre (MMF).

The NCTC comprises many export promotion councils (EPCs) and trade bodies of textile and apparel industry.

Its representatives, who are the stalwarts of textile industry, recently held a meeting with the Parliamentary Standing Committee on Labour.

The committee chaired by Bhartruhari Mahtab, including Members of Parliament, Subbarayan (Tirupur) and Shanmugam (Rajya Sabha) visited Coimbatore and Tirupur to study the potential for the growth of MMF textile industry in Tamil Nadu.

Many senior officials were also present in the meeting. T. Rajkumar, Coordinator, NCTC and Dr. A. Sakthivel, Chairman, AEPC, informed the Committee that Tamil Nadu being the largest textile manufacturing state accounting for 1/3rd of the textile business of the nation, housed with excellent infrastructure and eco system for innovation and manufacturing of high value-added MMF textiles, there is a tremendous potential for attracting new investments including FDI/JVs and creating new jobs for several lakhs of people.

It is pertinent to mention here that as India, particularly Tamil Nadu, has reached saturation in manufacturing of cotton textiles and apparel products, there is a tremendous scope for India to grab the opportunities thrown by China especially in the post-COVID-19 scenario, if a conducive policy is announced for MMF textiles and clothing products by facilitating a level playing field in the globalised environment.

NCTC stated that the anti-dumping duty and customs duty protection given for the domestic manufacturers and 18 per cent GST on MMF and 12 per cent GST on MMF yarn have been curtailing the growth of the MMF sector in India.

India could not import even speciality fibres that are not manufactured in the country under nil duty.  These MMF raw materials are produced by very few manufacturers. Cotton produced by over 6 million farmers does not attract any duty and is made available cheaper than the international price, while MMF is expensive up to 23 per cent.

NCTC has appealed to the Committee to recommend removing anti-dumping duty and also slotting the entire MMF value chain under 5 per cent GST rate on par with cotton value chain apart from addressing inverted duty structure issues at processing and capital goods.

On the other hand, since the new labour codes would be implemented shortly, NCTC has sought certain amendments in the new codes to ensure ease of doing business. Fixing uniform minimum wages across the country for all trades/job roles is essential to create a level playing field. There is a huge variation in the rates of minimum wages between states and also between trades/job roles within the state.

NCTC also appealed to advise State Governments to avoid applying Juvenile Justice Act that defines the child labour as 18 years below while Factories Act permits employment of adolescent workers aged between 16 and 18 subject to certain conditions.

Source: Apparel Online

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NBFCs, fintech companies urge FM Sitharaman to enhance lending facilities

Non-banking finance companies (NBFCs) and fintech players have urged Finance Minister Nirmala Sitharaman to enhance the lending facilities by three to four years which were announced and extended by the Reserve Bank of India (RBI) during Covid-19 lockdown.

"As expressed by the Prime Minister, there is a need to revive economic growth. This requires great effort for financial inclusion, including increased lending," said Harsh Kumar Bhanwala, Executive Chairman of Capital India.

Banks and capital markets play a big role but NBFCs -- be it micro-finance or otherwise -- also play a significant role in lending for small and medium enterprises. They serve in areas where banks are not accessible, said Bhanwala.

"Secondly, we request a separate window from refinancing entities for these small and medium NBFCs so there is assured line available to them for all type of accounts."

Bhanwala said the Income Tax Act section 194 provides exemptions to banks for tax deduction at source. Such facility should be also extended to NBFCs because they are also regulated by the RBI.

Yogendra Kashyap, Managing Director and CEO of Rapipay Fintech, said the government should encourage financial transactions through mobile phones.

"We are expecting the government to continue promoting financial inclusion to the last point in rural India. Some incentivisation need to done for point-of-sale (PoS), UPI promotions and Bharat QR code.

Source: The Business Standard

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Welspun India named amongst the most ‘Influential Innovators

World’s leading home textiles company Welspun India Limited was named amongst the most ‘Influential Innovators’ at the Clarivate South and South East Asia Innovation Award 2020.

The Mumbai-based company won the award in the corporation segment and was the only player from the textile industry.

The awards were based on an analysis of patent volume, citation volume, patent success, and globalisation level using patent data from Derwent World Patents Index™ (DWPI) and Derwent Patent Citations Index™ (DPCI).

It is worth mentioning here that Welspun India focuses on consumers’ needs and caters to them with innovations like Nanocore technology, which prevents dust mites and other allergens from entering home linens.

Additionally, the company introduced an industry-defining, multi-level traceability process Wel-Trak™ that tracks finished products back to the raw material as well as HygroCotton technology which traps the air in its core thereby making terry towels bloom after every wash and regulates a bedsheet’s temperature naturally.

Every year, Clarivate, a global leader in providing trusted information and insights to accelerate the pace of innovation, hosts the Innovation Forum, which also brings together leaders from academic, government and industry sectors across the region to share best practices and transformational initiatives that accelerate the pace of innovation.

“Innovation is an integral part of the Welspun’s DNA and the foundation on which our customer-centric solutions are built. Our innovation-driven approach has helped us to challenge the status quo, set new industry benchmarks and build an industry leading portfolio of 30 innovations over the years,” said Dipali Goenka, JMD & CEO of the company.

She added “We are proud to be recognised amongst the most ‘Influential Innovator’ by an illustrious industry forum such as South and South East Asia Innovation Forum by Clarivate. The award is a testament to our efforts and motivates us to keep developing more relevant and innovative solutions for our customers.”

Source: Apparel Online

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Kerala plans to set up dedicated VC fund, open govt market for startups

The Kerala Government is planning to set up a dedicated Venture Capital (VC) fund for start-ups in the State. The State also said it has opened up the government market for startup consortiums and is hiking the special fund for startup development.

During his interaction with the enterprise founders, organised by Kerala Startup Mission, Kerala Chief Minister Pinarayi Vijayan said that a proposal to set up the VC fund with the backing of public sector banks and Kerala State Industrial Development Corporation (KSIDC) is under active consideration,

“It’s the policy of the government to offer necessary financial aid to startups to blossom. The government will consider increasing the special fund for the development of new enterprises. Besides, the state will take further measures to enable entrepreneurs to improve their skills,” Vijayan said.

The government will think about earmarking more funds to strengthen the marketing side of startups. They can create a strong impression at the national and international level through expos and industrial cooperation. From this year the government has decided to form an ‘International Launching Pad’ for startups, he added

The Chief Minister said startups have already been given complete exemption in their rent for four months and there will be a partial exemption in the rent amount for the next three months.

Under KSUM’s Fund of Fund scheme, 11 startups have been given aid through Kerala Specific Angel Fund, which is the first-of-its-kind in the country,” Vijayan added.

KSUM is the nodal agency for entrepreneurship development and incubation activities in the state.

The Kerala Government is planning to set up a dedicated Venture Capital (VC) fund for start-ups in the State. The State also said it has opened up the government market for startup consortiums and is hiking the special fund for startup development.

During his interaction with the enterprise founders, organised by Kerala Startup Mission, Kerala Chief Minister Pinarayi Vijayan said that a proposal to set up the VC fund with the backing of public sector banks and Kerala State Industrial Development Corporation (KSIDC) is under active consideration,

“It’s the policy of the government to offer necessary financial aid to startups to blossom. The government will consider increasing the special fund for the development of new enterprises. Besides, the state will take further measures to enable entrepreneurs to improve their skills,” Vijayan said.

The government will think about earmarking more funds to strengthen the marketing side of startups. They can create a strong impression at the national and international level through expos and industrial cooperation. From this year the government has decided to form an ‘International Launching Pad’ for startups, he added

The Chief Minister said startups have already been given complete exemption in their rent for four months and there will be a partial exemption in the rent amount for the next three months.

Under KSUM’s Fund of Fund scheme, 11 startups have been given aid through Kerala Specific Angel Fund, which is the first-of-its-kind in the country,” Vijayan added.

KSUM is the nodal agency for entrepreneurship development and incubation activities in the state.

Source: The Business Standard

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Find the ‘good’ business partner at ASW Marketplace

The search to find ‘good’ business partners is an arduous and a never-ending task for buyers and this is what is bringing back the buyers to ASW Marketplace.

The virtual marketplace, which was launched early December last year, has been consistently attracting lots of buyers. And following the super success of ASW-organised V-EXPO, the number of registered buyers seems to be on the rise.

What defines a ‘good’ apparel supplier! A lot of criteria have to be met, which could range from basics like requirement of a good product to getting a competitive price. Of late, issues such as safety of workers and ethical practices are also factors that buyers are particular about.

This is where ASW Marketplace has been able to carve a niche for itself in such a short span of time.

While one country maybe good at offering quality apparels, another might offer good prices and a third may be responsive to latest fashion requirements. At ASW Marketplace, buyers can see, meet and interact closely with complaint apparel makers of one’s choice from Bangladesh, Sri Lanka, Indonesia and India.

Buyers have their own preferences of ‘good’ business partners and what’s worked in ASW’s favour is that it has been able to successfully offer those preferences 24X7.

Source: Apparel Online

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To benefit small and micro units, MCA panel suggests creation of small LLPs

A panel appointed by the Ministry of Corporate Affairshas recommended the creation of a new category of Limited Liability Partnerships (LLPs) – ‘small LLPs’ – for the benefit of small and micro enterprises. This panel, which was tasked to look at decriminalisation of LLP Act 2008, has also suggested that LLPs be permitted to issue non-convertible debentures (NCDs) to entities (body corporate and trusts) regulated either by the SEBI or RBI.

Advantage of LLP

A LLP is quintessentially a hybrid between a Limited Liability Company and a partnership. It has the advantages of being a body corporate, but at the same time internal governance and inter se relations among partners and LLP are regulated by the LLP Agreement and not by any statutory provisions.

If this reform of allowing LLPs to issue NCDs gets Parliamentary assent, then AIFs, including private equity funds, will be able to pump funds into several Special Purpose Vehicles that operate under the LLP structure in the infrastructure and real estate sector, say economy watchers.

The creation of a new category of ‘small LLP’ is expected to enable ease of living for corporates and its stakeholders and also be beneficial for small and micro enterprises as it will reduce the cost of compliance, and subject such class of LLP to lesser penalties in the event of default as has been done in the case of companies under Companies Act 2013.

The panel, headed by MCA Secretary Rajesh Verma, has recommended that LLPs with capital contribution of up to ₹25 lakhand turnover not exceeding ₹40 lakh in a financial year be allowed to opt for small LLP structures.

CurrentlyLLPs are not permitted to raise capital by way of issuance of debt securities. Also, AIFs are permitted to invest in LLP only in the nature of pure equity interest (and cannot provide loans) and are therefore not able to invest in a significant number of infrastructure and real estate projects which have been structured as LLPs. In India, because of regulatory reasons, several infrastructure projects are undertaken as special purpose vehicles in the form of LLP structure, which provide lesser compliance requirements.

Debt markets

Permitting LLPs to issue NCDs for raising capital and financing operations of such structures are also expected to help deepen the debt markets, which are yet to develop in a big way. The panel has also said that LLPs should not be permitted to issue NCDs to retail investors.

The panel has recommended that 12 compoundable offences be decriminalised and one penal provision be omitted in the Act. No serious changes has been suggested in the serious non-compoundable offences provided under the LLP Act.

G Ramaswamy, former CA Institute President and a member of the MCA-appointed panel, said that allowing LLPs to raise monies from controlled resources through NCDs will help them and enable growth of several mini corporates in the country. Implementing the recommendations of the panel can be a great initiative for growth of business of start-ups and first-time business entrepreneurs, he added.

Amarjit Chopra, former President of ICAI and member of the MCA panel, said this will promote the growth of LLPs in the country and ensure that people are not scared to convert either private limited companies into LLPs or partnership firms into LLPs.

Source: The Business Journal

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High Courts serve notice on Centre over IGST rebate by exporters

Two high courts (HCs) have served notices on the Union government, the Directorate of Revenue Intelligence, (DRI), and the Central Board of Indirect Taxes and Customs over the issue of denying rebate on integrated goods and services tax (IGST) paid by exporters enjoying the benefits of advance authorisation (AA) licence. Bombay and Punjab & Haryana HCs have issued these notices.

Gujarat HC has stayed the proceedings initiated by DRI to exporters over this issue. An AA licence is issued to exporters to allow them duty-free import of inputs, which are physically incorporated in export products.

Exporters were earlier entitled to import raw material without payment of IGST under the AA licence, and pay IGST on exports and claim rebate (refund) paid on exports. They received the benefits of rebate of IGST initially. However, the government then amended sub-rule (10) of Rule 96 of the central GST through a notification dated September 4, 2018. It denied rebates on IGST on exports if exporters enjoyed AA benefits with effect from October 23, 2017.

Earlier, Gujarat HC had upheld the validity of this rule.

The court also upheld the validity of another amendment to the rule that allows rebates to those who only avail of exemption on basic Customs duty and pay IGST on raw material. This amendment was made effective with retrospective effect.

This means that those who claimed a refund under this option need to pay back IGST on raw material, along with interest and avail of input tax credit. Aggrieved, exporters filed a review petition in Gujarat HC, as well as petitions in the Bombay and Punjab & Haryana HCs.

Meanwhile, DRI issued notices to exporters and initiated proceedings against them over the issue.

“After DRI notices, the matter has been raised afresh in several courts which have issued notices or granted a stay on proceedings. The retrospective amendment is also a subject matter of challenge,” said Abhishek Rastogi, who is arguing a plethora of petitions for exporters.

Offering rationale behind the fresh batch of petitions, Rastogi said while the authorities allege there is twin benefit, there is actually no additional benefit, given the exporters are in any case eligible to a refund of taxes on the input side in some way or the other.

Source: The Business Standard

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INTERNATIONAL

Panel: China, World Health Organisation should've acted quicker to stop coronavirus pandemic

A panel of experts commissioned by the World Health Organization has criticized China and other countries for not moving to stem the initial outbreak of the coronavirus earlier and questioned whether the U.N. health agency should have labeled it a pandemic sooner.

In a report issued Monday, the panel led by former Liberian President Ellen Johnson Sirleaf and former New Zealand Prime Minister Helen Clark said there were "lost opportunities to apply basic public health measures at the earliest opportunity" and that Chinese authorities could have applied their efforts "more forcefully" in January shortly after the coronavirus began sickening clusters of people.

"The reality is that only a minority of countries took full advantage of the information available to them to respond to the evidence of an emerging pandemic," the panel said.

The experts also wondered why WHO did not declare a global public health emergency sooner. The U.N. health agency convened  its emergency committee on Jan. 22, but did not characterize the emerging pandemic as an international emergency until a week later. At the time, WHO said its expert committee was divided on whether a global emergency should be declared.

"One more question is whether it would have helped if WHO used the word pandemic earlier than it did," the panel said.

WHO did not describe the COVID-19 outbreak as a pandemic until March 11, weeks after the virus had begun causing explosive outbreaks in numerous continents, meeting WHO's own definition for a flu pandemic.

As the coronavirus began spreading across the globe, WHO's top experts disputed how infectious the virus was, saying it was not as contagious as flu and that people without symptoms only rarely spread the virus. Scientists have since concluded that COVID-19 transmits even quicker than the flu and that a significant proportion of spread is from people who don't appear to be sick.

Over the past year, WHO has come under heavy criticism for its handling of the response to COVID-19. U.S. President Trump slammed the U.N. health agency for "colluding" with China to cover up the extent of the initial outbreak before halting U.S. funding for WHO and pulling the country out of the organization.

An Associated Press investigation in June found WHO repeatedly lauded China in public while officials privately complained that Chinese officials stalled on sharing critical epidemic information with them.

 

Although the panel concluded that "many countries took minimal act ion to prevent the spread (of COVID-19) internally and internationally," it did not name specific countries. It also declined to call out WHO for its failure to more sharply criticize countries for their missteps instead of lauding countries for their response efforts.

Last month, the author of a withdrawn WHO report into Italy's pandemic response warned his bosses in May that people could die and the agency could suffer "catastrophic" reputational damage if it allowed political concerns to suppress the document, according to emails obtained by the AP.

Source: The Economic Times

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CPEC: China’s designs, Pakistan’s ambivalence, and India’s opposition

The China Pakistan Economic Corridor (CPEC) is earmarked as a flagship project of the Belt and Road Initiative (BRI), which is a grand strategy aimed at restoring China’s “rightful’’ great-power status in the world. With an initial outlay of $46 billion, CPEC is envisaged as a hub with Gwadar’s port, energy, transport infrastructure and industrial cooperation as its four main spokes. This project aims to create an alternative route to transport oil and gas to China and to spurt economic growth and development across its remote western regions.

The CPEC cuts through Pakistan-Occupied Kashmir (POK) and the trans-Karakoram tract of Shaksgam, which was illegally ceded by Pakistan to China on March 2, 1963 under a provisional boundary settlement. The entire region of Gilgit-Baltistan (GB) through which the highway passes is located close to the Siachen Glacier as well as to Ladakh, the current flashpoint between India and China. Following the effective nullification of Article 370 of the Indian Constitution on August 5, 2019, India has reiterated its long-standing claim to GB in POK.

Economic motivation apart, China seeks to use the CPEC to consolidate its presence in a disputed region. If internal instability overwhelms Pakistan in the future, the CPEC affords China an opportunity to claim Hunza on the basis of specious historical records.

For China, the CPEC is a beachhead in South Asia, to facilitate a broader thrust in the Persian Gulf. It also provides a maritime connect to Djibouti and the littoral states.

The CPEC is viewed with ambivalence in Pakistan. It is regarded as a panacea for Pakistan’s ailing economy. The road and rail networks, especially the energy transportation systems, have the potential to stretch across to Afghanistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia and even to Mongolia. The project is also expected to give a shot in the arm to Pakistan’s debilitated power sector, with China committed to spending US $35 billion to build up to 19 new power plants.

But contrary to expectations that development in the wake of the CPEC project will bring peace to the insurgency-wracked province of Balochistan, the Chinese presence appears to have infused the Baloch nationalist movement with new energy. Chinese workers, seen as collaborators in the exploitation of the region’s natural resources, have become a major target for insurgents. Even in the army’s heartland of Punjab, media reports indicate clashes between Chinese workers and local police personnel.

The Pakistani military is determined to protect Chinese lives and investments, especially in the wake of serious incidents such as the attack on the Zaver Pearl Continental Hotel in Gwadar. A Special Security Division (SSD) comprising 9,000 Pakistan soldiers and 6,000 paramilitary personnel has been set up as a dedicated force.

The colossal CPEC project has extracted a high cost across Pakistan. In the case of the Sahiwal Coal power plant project in Pakistan’s Punjab province, many people were forced to part with agricultural land. The police slapped terrorism charges against those who resisted. Some Sahiwal residents have reported health issues, attributed to water contamination caused by the coal-fired power plant. The prevalence of asthma, pneumonitis and chronic obstructive pulmonary disease (COPD) is on the rise in the area.

China realises that India’s support for the Belt and Road Initiative (BRI), of which the CPEC is the lynchpin, is crucial to its regional success. India’s non-participation in the BRI is predicated on the unacceptability of the CPEC traversing parts of Jammu and Kashmir illegally occupied by Pakistan and China. It is, as stated by India’s External Affairs Minister S Jaishankar, a project initiated without consulting India. Besides, BRI, as a whole, lacks transparency and is geared to advancing China’s interests through “debt trap” financing. It should come as no surprise that India has maintained its consistent position in not endorsing the BRI.

Source: The Hindustan Times

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India’s woven garment export to UAE soars in Nov. ’20; YTD period still down

India’s export of woven garments saw massive growth in its major destination UAE during November ’20, but the total exports in woven segment fell significantly.

Seeing 114.30 per cent growth in UAE during Nov. ’20, India clocked US $ 83.88 million as against US $ 37.14 million in the same month of 2019.

As far as Jan.-Nov. ’20 period is concerned, India witnessed a decline of 16.26 per cent in the UAE market and exports (of woven clothing) valued US $ 566.60 million.

Though there is a steady growth of India’s exports in UAE, total export of woven clothing to rest of the world disappointed the exporters in wake of pandemic.

India managed to clock just US $ 475.75 million from its woven garment exports to the world, declining 10.24 per cent on Y-o-Y basis in November ’20.

During Jan.-Nov. ’20 period, India’s export of woven segment reached US $ 5.56 billion – falling 27.60 per cent and the plunge was contributed by all major destinations.

See below India’s performance in woven clothing export to its major 5 destinations in Jan.-Nov. ’20 period –

•             USA: US $ 1,533.06 million Y-o-Y Change: (-) 26.67%

•             UAE: US $ 566.60 million Y-o-Y Change: (-) 16.26%

•             UK: US $ 492.41 million Y-o-Y Change: (-) 36.57%

•             Germany: US $ 302.64 million Y-o-Y Change: (-) 27%

•             Spain: US $ 296.83 million Y-o-Y Change: (-) 34.29%

Source: Apparel Online

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Biden immigration proposal looks to roll back four years of Trump's hardline policies

On the same day he is inaugurated into office, Joe Biden will introduce immigration legislation that will include an eight-year pathway to citizenship for nearly 11 million immigrants living in the United States without legal status.

The legislation, first reported by the Washington Post, will also include expanding refugee admissions and an enforcement plan that includes deploying technology to patrol the border, a Biden transition official confirmed Tuesday.

Biden’s plan comes after four years of a hardline approach to immigration from President Donald Trump, which led to several controversial policies, including his effort to end the Deferred Action for Childhood Arrivals program. The Supreme Court upheld that program in a ruling last year.

Democrats hailed Biden's proposal Tuesday. Senate Democratic Leader Chuck Schumer wrote on Twitter that he looks forward to getting comprehensive immigration reform signed into law. 

“Comprehensive immigration reform with a path to citizenship is one of the most important things a Democratic Congress can do,” Schumer wrote in the Tweet.

Some immigration activists also were cautiously optimistic about the proposal.

"While the bill is welcome, it's really just the beginning," said Maria Praeli, government relations manager at FWD.us, an immigration advocacy group. "What Joe Biden now has to lead on is getting legalization through the finish line. He has to use his leadership, his bully pulpit, to do more than introduce an immigration reform that like captures the vision. So a good first step, not the end of the game."

But Republicans were less eager to embrace the incoming president's plan. Sen. Tom Cotton, R-Ark., wrote in a tweet that Biden was “wasting no time trying to enact his radical immigration agenda,” decrying specifically the pathway to citizen

Democrats control Congress, but the margins are slim

Despite Democrats holding a slim majority in both the House and Senate, the proposed legislation could be difficult to pass. Democrats in the Senate would need all 50 members to support the bill in order to force a tie with Republicans. Kamala Harris could then break that tie as vice president.

In the House, Democrats hold a 222-to-211 majority, so they can afford few defections from their party in order to pass legislation.

Under Biden's proposal, immigrants without legal status living in the U.S. as of Jan. 1, 2021, would be put in a temporary legal status for five years, with a green card being granted if they meet requirements like passing a background check and paying taxes. They then could apply for citizenship three years later.

Some undocumented immigrants will see a quicker process in the pathway to citizenship. Deferred Action for Childhood Arrivals (DACA) recipients, also known as “Dreamers,” in addition to agricultural workers and those in the temporary protected status program could qualify for green cards immediately.

"It will be about creating a pathway for people to earn citizenship. We're going to reduce the time from what is now has been currently 13 years to eight years. We are going to expand protections for Dreamers and DACA recipients,” Vice President-elect Kamala Harris said during an interview with Univision last week. "These are some of the things that we're going to do on our immigration bill, and we believe it is a smarter and a more humane way of approaching immigration."

In a memo released Saturday, Biden’s incoming chief of staff Ron Klain also noted that the Biden Administration will begin reuniting families separated at the border, where 628 parents who were separated from their children at the border are still missing as of December.

Path to passing legislation is not easy

For generations, comprehensive immigration reform has been at once the legislation with the most consensus and trickiest to pass. Ronald Reagan signed the bipartisan 1986 Immigration Reform and Control Act, which granted amnesty to some 3 million undocumented immigrants living in the U.S.

But throughout the 1990s and ramping up in the early 2000s, commitments to more strictly secure the border were woven into any bill offering status relief for undocumented immigrants, said Doris Meissner, head of the U.S. Immigration Policy Program at the Migration Policy Institute. This led to deeper divides over legislation, as political parties grew further apart.

“Immigration legislation doesn’t pass without it being bi-partisan,” Meissner said. “Since the (political) center has cratered, immigration reform has been one of the victims.”

The last attempt at meaningful immigration legislation came in 2013 with the Border Security, Economic Opportunity, and Immigration Modernization Act, authored by the so-called “Gang of Eight,” a bipartisan group of U.S. senators – four Republicans and four Democrats. It passed with a strong majority in the Senate but then-Speaker of the House John Boehner, a Republican, never called the bill to the House floor, allowing it to expire.

Past immigration reform bills may have failed because there was too much emphasis on border security and other issues crammed into them, said Elissa Steglich, co-director of the Immigration Clinic at the University of Texas School of Law in Austin.

“The larger you make it, the more certain it is to fail,” Steglich said. “The (Biden) administration was right to limit it to pathway to status.”

Rep. Mo Brooks, R-Ala., claimed in a tweet that the pathway to citizenship for undocumented immigrants “means more jobs lost and wages suppressed for tens of millions of American citizens.”

“How can Socialists credibly claim to represent lower income Americans when Socialist border security weakness hurts so many struggling American families?” Brooks said.

However, Rep. Norma Torres, D-Calif., said that some members "are eager to secure a path forward for Dreamers and are ready to work with the incoming Administration to finally make this a reality."

Steglich pointed to past successful immigration bills – such as the Victims of Trafficking and Violence Protection Act of 2000, which offers protection for undocumented immigrants who have been victims of certain crimes – as examples that Congress can unite to pass meaningful bills. “There have been moments,” she said

One advantage of the new proposal: It’s coming early in a new Congress and new administration, with midterm elections still two years away, Meissner said.

“If it comes early, it has a chance,” she said. “The closer it gets to an election, it gets harder and harder to pass.”

Source: USA Today

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